Monday, 17 September 2012

How Much Do Money Matters Really Matter?

In my new book, Great Retirement, Great Sex, I haven’t included much financial advice at all. Why? Well firstly, I’ve already written several books on business and this time around I wanted a real change. Also, any sections on pure finance would have proved pretty financially inefficient for me I think, as I would have needed to hire somebody to prod me with a stick every five minutes to stay awake. Mainly, however, it’s because Great Retirement is a self-help book geared at making you happy, and studies have shown that money isn’t nearly as significant a factor in overall happiness as you might think.

The American National Academy of Sciences published a survey of 341,000 people, which found that happiness takes a dip in early adulthood, rises in our forties (easily outstripping our earlier years) and peaks at 85!

It makes sense if you think about it. As we age, we mature, even while it seems like we’re just getting sillier! I actually think the ability to let go and be silly once in a while is a sign of maturity. In addition to this, we all know that the more time we spend with someone, the better we get to know them. This applies to ourselves too.  As we age we become more aware of and comfortable with our likes and dislikes. We know who our friends are, and frankly we just don't care as much what anyone else thinks of us anymore.

I think the feeling of liberation that comes from this is summed up well in these lines of Jenny Joseph’s poem, Warning:

When I am an old woman I shall wear purple
With a red hat which doesn’t go, and doesn’t suit me.

Of course, it’s not exactly a revelation that not having enough money can make people pretty miserable. After all, as Leo Rosten said, “Money can’t buy you happiness, but neither can poverty.” We’re all aware of the money troubles that can overshadow the freedom of finishing work. After all, they don’t call them your “golden years” because of the fortune retirement is likely to leave you with.

But being in the money hardly guarantees fulfillment either. In fact, it has the power to make you very miserable too if you let it.

Studies show that a person’s day-to-day happiness increases along with their income only up to approximately £50,000 ($80,000). After that it hits a flat rate, essentially showing that money can buy you happiness only up to the point where all your basic needs are cared for and your stress is minimised. After that you’re going to need something else for a pick-me-up.
That’s where things like community, personal interests, a positive attitude and sex come in. Sex never gets boring, it’s absolutely proven to make you happier and healthier, and best of all... it doesn’t cost a penny!

Studies can back me up again here. One published in 2004 by the National Bureau of Economic Research found that increasing their number of sexual encounters from once a month to once a week boost’s a person’s happiness by as much as a $50,000 (£31,000) pay rise. So this weekend stay in bed instead of heading to the bank – you’ll be glad you did!
Some financial planning is unavoidable if you want to make the most of your retirement without worry. But remember, happiness lies more in how you choose to use the money, especially if you use it to work on being a loving partner.

Next week here you can read about the importance of staying healthy as you age.